Enterprise Resource Planning

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Computer Standards & Interfaces 24 (2002) 337 – 346 www.elsevier.com/locate/csi

A synergic analysis for Web-based enterprise resources planning systems David C. Yen a,1, David C. Chou b,*, Jane Chang a,1
b a Department of Decision Sciences and MIS, Miami University, Oxford, OH 45056, USA Department of Computer Information Systems, Eastern Michigan University, 412 Owen Building, Ypsilanti, MI 48197, USA

Received 8 October 2001; received in revised form 3 December 2001; accepted 12 December 2001

Abstract As the central nervous system for managing an organization’s mission and critical business data, Enterprise Resource Planning (ERP) system has evolved to become the backbone of e-business implementation. Since an ERP system is multimodule application software that helps a company manage its important business functions, it should be versatile enough to automate every aspect of business processes, including e-business. D 2002 Elsevier Science B.V. All rights reserved. Keywords: Enterprise resource planning (ERP); E-business; Customer relationship management (CRM)

1. Introduction Enterprise resources planning (ERP) has been used in major business applications, such as finance, human resources and manufacturing. ERP’s financial applications furnish corporate financial management. Its human resources applications handle employee benefit programs, payroll management, and other human resource management. Finally, its manufacturing applications cover areas such as inventory control and production management. ERP systems are software that can be used to integrate information across all functions of an organization to automate corporate business processes. In other word, an ERP system is a

Corresponding author. Tel.: +1-734-487-0054. E-mail addresses: yendc@muohio.edu (D.C. Yen), david.chou@emich.edu (D.C. Chou). 1 Tel.: + 1-513-529-4826.


business management system that integrates all facets of the business, including planning, marketing and manufacturing. More than 20,000 firms in the world spent 10 billion US$ to install the ERP systems in 1997 [12]. Now, around 39% of large companies and 60% of smaller companies are deploying ERP systems, and 70% of Fortune 1000 companies have implemented core ERP applications for manufacturing, finance, human resources, and other main areas. A recent study of IDC’s (International Data) European Software Expertise Center reports that ERP software accounts for more than half of the software licenses and maintenance revenues in Western Europe, growing twice the rate of the overall application software market. The expected annual growth rate for the ERP market over the next 5 years is 37%. With this growth rate, total ERP corporate revenue is expected to reach 52 billion US$ by 2002 [1]. ERP continues to be one of the largest, fastest-growing, and most influential

0920-5489/02/$ - see front matter D 2002 Elsevier Science B.V. All rights reserved. PII: S 0 9 2 0 - 5 4 8 9 ( 0 1 ) 0 0 1 0 5 - 2


D.C. Yen et al. / Computer Standards & Interfaces 24 (2002) 337–346

players in the application software industry in the next decade. It is interesting to know why companies, especially larger companies, continue to invest heavily in ERP application software. A primary reason is that ERP can help companies reengineer their business processes and compete in the market. Indeed, ERP software can help companies integrate business processes in a way that traditional applications cannot achieve. Business owners also expect ERP applications to improve decision-making capabilities for functions such as strategic procurement, so that supplier and parts rationalization can be streamlined. Also, ERP applications deliver additional revenues by allowing companies to mass customize their product and service offerings so they can adapt to the rapidly changing world. This article provides a synergic analysis for ERP and e-business. Section 2 discusses the implications of ERP, includes the...